Photo voltaic Panel Costs Down 30–40% In 2023, US Costs Down 15%

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One of many fascinating notes within the lately printed US Photo voltaic Market Perception report is that the typical world photo voltaic module value within the third quarter of 2023 was down 30–40% from the typical world photo voltaic module value within the 1st quarter of 2023. That is primarily resulting from provide–demand imbalances in China. The US market will get nearly no photo voltaic panels from China resulting from tariffs and the Uyghur Pressured Labor Prevention Act (UFLPA), with these Chinese language photo voltaic panels accounting for simply 0.1% of US photo voltaic module imports. Nonetheless, these world tendencies have had notable ripple results on US photo voltaic module costs, which have been down 15% in Q3 2023 in comparison with Q1 2023.

“Nonetheless, it’s necessary to acknowledge the variations in photo voltaic module provide dynamics between the US and the remainder of the world. Different world areas are at present in a state of module oversupply. As China continues its large growth of producing capability throughout the whole photo voltaic worth chain, there was important downward strain on world module pricing. The impacts of this oversupply state of affairs have escalated lately, with studies of spot module costs outdoors of the US as little as 14-15 cents/watt,” the report states.

“In contrast, the US market is considerably insulated from these pricing dynamics. Lower than 0.1% of US module imports this yr have come from China resulting from a mix of tariffs (anti-dumping and countervailing duties [AD/CVD], Part 201, and Part 301). Nearly 80% of modules for the utility-scale market come from Southeast Asia. And whereas Southeast Asia is usually a low-cost area for module manufacturing, producers are nonetheless uncovered to the restrictions on polysilicon sourcing from China as a result of Uyghur Pressured Labor Prevention Act (UFLPA).

“Consequently, module provide to the US utility-scale sector remains to be tighter than different world areas. Demand for modules from high tier 1 producers is excessive. This has stored US module pricing considerably above value factors in different nations, even with out anticircumvention tariffs (for extra on photo voltaic element pricing, see Wooden Mackenzie’s PV Pulse). On steadiness, availability of modules for the US utility-scale market remains to be constrained however has improved considerably this yr. In fact, module availability will proceed to enhance as extra home manufacturing comes on-line.”

What’s stunning and a bit loopy is that the utility-scale solar energy market is having far more bother now getting different components. Photo voltaic module provides have began flowing fairly effectively, however the business has to attend a very long time for different sorts of electrical tools. The end result, naturally, can be rising costs. “Transformer availability has develop into a widespread downside, with wait instances extending previous 2 years in some instances. Excessive-voltage circuit breaker lead instances have almost doubled within the final yr to a mean of 100 weeks (see Wooden Mackenzie’s report H2 2023 US photo voltaic PV system pricing). This has already elevated steadiness of system (BOS) pricing for utility-scale photo voltaic. With no indicators of this pattern reversing, we count on electrical tools availability to be considered one of a number of components slowing utility-scale photo voltaic progress within the subsequent a number of years.”

If we break it down by sector (chart above), we see that residential solar energy system pricing was up 3%, industrial solar energy system pricing was down 2%, and utility-scale solar energy system pricing was up 5% (single-axis trackers) to six% (fixed-tilt techniques).

Listed below are extra particulars on how the pricing for these completely different segments was cut up out by element: “Module costs declined 12% for the residential and 6% for the industrial section year-over-year. The utility section continues to see elevated module pricing as a result of one-year lag in module procurement mirrored in our pricing knowledge. For distributed photo voltaic, the decline in module prices has been offset by a rise within the steadiness of kit in addition to gentle prices. Throughout the 4 completely different market segments, labor and engineering prices have elevated anyplace from 5-25%. Tools element prices have additionally been rising over the previous few quarters as a result of rise in inflation. Nationwide PV system costs are up throughout all segments aside from the industrial section, which witnessed a drop of two% yr over yr.”

We’ll see what occurs in This autumn and in 2024, however it’s clear there are a selection of things influencing pricing, together with variations between the market segments. It’s arduous to understand how a lot will change within the coming months, because the financial and political conditions feels a bit up within the air and inclined to sturdy shifts within the tendencies. We will see.